Multiple-device plans: keep it simple

John C. Tanner

Multiple-device plans: keep it simple

July 20, 2012

Over in the US, the tech blogs are a-buzz over AT&T’s announcement that it will launch a shared data plan (a.k.a. multiple-device plan, a.k.a. data bucket plan) around the end of next month called “Mobile Share”. Verizon Wireless launched a similar plan called “Share Everything” last month.

The move by both cellcos to bundle multiple devices into a single data plan has been expected for some time. Indeed, they’re not even the first cellcos to do it – Rogers Wireless, Telefonica, Telenor and CSL have already launched multiple-device plans, and they won’t be the last. Industry analysts generally see multiple-device plans as inevitable, as smartphones, tablets and other devices rise to prominence in the mobile space to the point where separate per-device plans make less and less sense to consumers.
 
The catch is that while multiple-device plans sound like a no-brainer on paper, they have to be carefully designed to make sense to consumers and provide tangible value.
 
For example, both AT&T Mobile Share plan and the Verizon Share Everything plan are somewhat complicated, as the monthly fee will depend not only on your data cap, but also on how many devices you want to connect. For example, in addition to the actual data plan, Verizon charges $40 a month per smartphone, $30 per feature phone, $20 per laptop, netbook, dongle and hotspot device, and $10 per tablet. AT&T has a similar scheme, though its smartphone fee gets cheaper as your data cap gets higher.
 
Compare that to CSL’s dead-simple multi-device plan for its 1010 business brand [PDF]: three monthly plans (5GB, 15GB, and 30GB), all of which provide one primary SIM and four secondary SIMs. That’s it.
 
Meanwhile, there’s the question of perceived value in a multiple-device plan – yes, it’s easier than maintaining different accounts for each device, but customers will also want to know: is it cheaper?
 
In the case of CSL, it is, as Ovum’s Nicole McCormick observed in a research note last month:
 
For example, a 5GB mobile broadband dongle plan costs HK$349 per month while an 800MB smartphone LTE plan costs HK$299 per month. This works out to be 8% more expensive than CSL’s high-end bucket plan, which provides a 30GB data allowance.
 
But the same can’t be said for AT&T’s Mobile Share – in fact, in some cases it could be more expensive than having separate plans. Wired Gadget Lab blog crunched the numbers several different ways, and concluded that in most cases, customers will pay the same or even more per month for Mobile Share plans than they would under separate subscriptions.  
 
The point isn’t that AT&T’s shared data plan is necessarily a bad one. After all, users are getting unlimited voice minutes and messaging for their money, as well as the convenience of putting all their devices under one monthly plan.
 
Also, as McCormick points out, the tradeoff CSL faces with its cost-saving multiple-device plan is revenue cannibalization – every existing customer that switched to the bucket plan will pay less per month. (On the other hand, it also makes them cheaper for CSL to manage.) 
 
But it’s up to AT&T and Verizon – and any other cellco who adopts a similar model for their multiple-device plans in future, for that matter – to explain clearly to their customers the value they're getting, especially if multiple-device plans are asking customers to spend more.
 
Given the relative complexity of the plans they're offering (and CNET’s Marguerite Reardon does a good job here of illustrating just how confusing they can be) and the track record of both cellcos in explaining the value of swapping unlimited data plans for caps, they’ve got their work cut out for them.
Thumbail image from server side store: 
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